Type 1 and Type 2 diabetes both lead to the gradual loss of functional insulin-producing beta cells. In attempts to develop therapies to treat diabetes, significant research efforts are now focused on generating alternative sources of functioning beta cells from embryonic stem (ES) cells or alternative sources of adult stem/progenitor cell populations. The goal of this proposal is to understand the regulation of beta cell differentiation and maturation during embryonic development. These studies will allow us to define the experimental conditions that are necessary to efficiently differentiate functional beta cells from alternative cell sources. We have identified Nkx2.2 as a critical regulator of the specification and differentiation of defined islet cell populations;Nkx2.2 is essential for the formation of all insulin-producing beta cells and most glucagon-producing alpha cells. We have also determined that, in the absence of endogenous Nkx2.2, an Nkx2.2 repressor derivative is sufficient to differentiate all alpha cells and a small number of immature beta cells. At the molecular level, the rescued beta cells are similar to the non-functional beta cells generated in ES cell differentiation protocols. Alternatively, misexpression of the Nkx2.2 repressor derivative in adult beta cells down- regulates late transcriptional targets that are normally activated by Nkx2.2 and leads to the disruption of beta cell function. Based on these findings, we hypothesize that Nkx2.2 functions both as a repressor and activator in the different pancreatic cell types and at different stages of islet cell development to promote islet cell type specification and maturation. Furthermore, we propose that the function of Nkx2.2 is through its different protein domains. Understanding how Nkx2.2 functions to specify islet cell development will be essential for using it as a tool to direct the differentiation of beta cells. The studies in this proposal will define when and in which cell types the different Nkx2.2 functions are critical for islet cell-type specification. In addition, we will identify the functional domains of the Nkx2.2 protein that modulate Nkx2.2 activity during these developmental processes. In summary, this application is focused on understanding the regulation of beta cell differentiation. The proposed studies will elucidate the earliest molecular mechanisms that regulate islet cell differentiation and will provide additional biological tools to manipulate the differentiation of functional beta cells from alternative cell sources for therapeutic purposes. PUBLIC HEALTH RELEVANCE: Diabetes is a growing world health problem that results from the gradual loss of functional insulin producing beta cells. The proposed research will elucidate the regulation of pancreatic islet cell type differentiation. This research will facilitate our ability to promote beta cell differentiation from a variety of cell sources in order to provide large pools of islet beta cells for cell replacement therapies.